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Empty Dwelling Management Orders - Housing Act 2004

Everyone would agree that the enduring housing shortage in the UK could be partly solved if only some of the unoccupied houses in our towns and cities could be occupied again.

Seems common sense therefore that government should consider some kind of enforcement on those who continue to leave their properties empty.

In England today there are an incredible number of unoccupied houses – around 300,000 houses have been unoccupied for 12 months or more!

The Government has said that it would like to fill 25,000 empty homes by 2010. 

Statistics from Hometrack say that where there is an empty property nearby it can reduce the prices of a house by up to 18%.

In the case of some properties, there may be good reasons why they are empty – for example they may be owned by someone who is old and no longer capable of living alone in a house.

It may be that the house has been inherited from a parent and because of reasons of sentimental attachment, the relatives have been reluctant to sell?

However, one of the new powers in the Housing Act 2004 could change the way that these empty homes are managed; the new powers could even create new opportunities for landlords too!

Local authorities will soon be able to issue what are called Empty Dwelling Management Orders (EDMOs).

These will give local authorities powers to come in and take over the management of a property and do whatever it takes to make a property fit for occupation once more.

To do this the local authority will first need to apply to a Residential Property Tribunal for approval of a draft order and show that they have already done all they could to contact the owner and work with them to bring the property back into occupation.

In effect they will be saying to the tribunal, “Look, the issuing of an EDMO offers the only realistic way to get the property occupied in the future.”

An EDMO can be seen as a kind of “in-between” option for a council – lying between working with an owner to put it back into use and the issuing of a Compulsory Purchase Order (CPO).  Unlike a Compulsory Purchase Order, the owner remains as owner but the council can take over the management of the property.

Welcome to the March 2006 Issue

The Housing Act 2004 (due to commence 6th April 2006) contains provisions for Empty Dwelling Management Orders—Interim and Final Orders—(EDMO) which will enable local authorities to take management control of private dwellings.

The UK housing shortage is serious and it affects the whole property market. Seems common sense therefore that government should consider some kind of enforcement on those who continue to leave properties empty—but, as we all know, it’s not only private landlords who are culpable here, local authorities are often as much to blame!

So we give local authorities the power to take away management rights from private owners—even though in some cases they have shown themselves incapable of managing their own properties?

A whole raft of measures being introduced by the Housing Act ads a new layer of bureaurocracy the like of which, in some cases, has not been seen before in the UK—Let’s hope these run smoothly and my tinge of cyniscm is proved wrong.    Editor.

How does the EDMO work?

Everyone would agree that the enduring housing shortage in the UK could be partly solved if only some of the unoccupied houses in our towns and cities could be occupied again.

Seems common sense therefore that government should consider some kind of enforcement on those who continue to leave their properties empty.

In England today there are an incredible number of unoccupied houses – around 300,000 houses have been unoccupied for 12 months or more!

The Government has said that it would like to fill 25,000 empty homes by 2010. 

Statistics from Hometrack say that where there is an empty property nearby it can reduce the prices of a house by up to 18%.

In the case of some properties, there may be good reasons why they are empty – for example they may be owned by someone who is old and no longer capable of living alone in a house.

It may be that the house has been inherited from a parent and because of reasons of sentimental attachment, the relatives have been reluctant to sell?

However, one of the new powers in the Housing Act 2004 could change the way that these empty homes are managed; the new powers could even create new opportunities for landlords too!

Local authorities will soon be able to issue what are called Empty Dwelling Management Orders (EDMOs).

These will give local authorities powers to come in and take over the management of a property and do whatever it takes to make a property fit for occupation once more.

To do this the local authority will first need to apply to a Residential Property Tribunal for approval of a draft order and show that they have already done all they could to contact the owner and work with them to bring the property back into occupation.

In effect they will be saying to the tribunal, “Look, the issuing of an EDMO offers the only realistic way to get the property occupied in the future.”

An EDMO can be seen as a kind of “in-between” option for a council – lying between working with an owner to put it back into use and the issuing of a Compulsory Purchase Order (CPO).  Unlike a Compulsory Purchase Order, the owner remains as owner but the council can take over the management of the property.

Don’t worry if your place is a bit dilapidated and you go away for a few weeks. There is no possibility that you will find the council has taken over while you were away!

The fact is that a council cannot apply to get an EDMO on just any empty property; the property will have to have been empty for over 6 months.

Initially they will have to apply for an Interim Order lasting up to 12 months. If at the end of this period the property is occupied, the order is cancelled.

However, if the place is still unoccupied and the council thinks more work would be required to get it suitable for occupation, it can then apply for a Final Management Order. These can last for up to 7 years.

With the Final Management Order the council would be entitled to possession of the property and would be able to do anything that the owner could do, even creating leases and licenses.

Under Interim Orders the council would have to work with the owner (which could be a leaseholder or a freeholder) and obtain their consent first. 

Whether under Interim or Final Management Orders the council can collect rents.

These would be paid over to the owner after the deduction of the council’s costs plus any other parties that need to be compensated; this could include the mortgage lender or any party who suffers a loss of value as a result of the order.

The council would have to account for rents received as well as all expenditure made.

There is a right for owners to appeal. 

Are there any exemptions ?

The EDMOs are applied to private properties only, but yes, there are exemptions.

Properties owned by councils and registered social landlords are exempt!

This is inevitably leading to some disquiet amongst the private landlord community when note is taken of surveys which have shown councils in a bad light when comparing their management efficiencies to those of the average private landlord. 

Of course, it would be argued here that we are not talking about the average private landlord, who by and large is a responsible and an efficient manager, and indeed scores more highly with their tenants in surveys than do many council property managers.

No, here we are talking about the minority of irresponsible or negligent owners who underutilize and under manager their properties to the extent that whole area and living environments are affected and housing resources are wasted.

Other types of properties to be exempted will include those where the owner is living away for a period, holiday and second homes, houses which are for sale or to let, where the mortgage lender is in possession and intends to sell and those where the owner has recently deceased.

Houses that are being renovated and those which are awaiting planning permission / building control approval are also exempt. This list of exemptions could, however, be subject to change.

Some in the Government expressed concerns that these exemptions could be used by owners as excuses to keep the property empty, so there will be time limits placed on how long some of these reasons could remain valid.

To stop this, the councils will have powers to apply to the tribunal to terminate an existing lease or license if they feel that these are being used by an owner as an excuse to keep the property, whilst he really has no intention of trying to get it back into occupation.

.           

Mackenzie Ward Estate Agents

MacKenzie Ward is privately owned and was founded in 1997                      

The current owners took over the running of the firm in the summer of 2003.

The company continues to pride themselves in providing a better service and firmly believe that with the assistance of their new premises next to the Hind Hotel in the centre of Wellingborough, Offices in Park Street Wellingborough Spencer Parade Northampton and Wellingborough road Finedon, will help the business grow from strength to strength.

Mackenzie Ward  sell and let homes to prospective clients throughout Northamptonshire as a county.

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